Please help.

5 Jacob Skhosana is employed by Consult2U Ltd. Apart from his employment, Jacob also earns passive income in the form of rentals, dividends and interest from his investment in property and collective investment scheme holding. The following information is relevant for the 2016 year of assessment: Employment ) Cash salary from employment of R750,000. (ii) Contribution to medical aid of R36,000 (Jacob is the main member with his wife and two children listed as dependants). (iii) Pension contribution of R75,000. Rental trade - single property (iv) Rental income amounted to R144,000. (v) Jacob received a security deposit of R7,000 from a new tenant in May 2015. Such security deposits are held in a separate bank account on which Jacob earns interest. The amount is in a separate account for record keeping purposes. (vi) A security deposit of R5,000 received in 2013 was not returned to the tenant who vacated the property in March 2015, due to damage found. Jacob spent the R5,000 plus an additional R20,000 repairing the damage and repainting the property. He also spent a further R162,000 on a new kitchen for the property in April 2015, in the hope of attracting a higher rental. (vii) The other running expenses for the rental property amounted to R40,000 for the year. All of these expenses are deductible for income tax purposes. Investments (vill) The tax certificate from the collective investment scheme showed the following: (a) Gross local dividends received - R14,000 (b) Tax on local dividends - R2,100 (c) Local dividends not subject to tax - R13,000 (d) Dividends from real estate investment trusts (REITs) - R2,000 (e) Interest - R5,000 (f) Gross foreign interest - R3,500 (g) Foreign tax on interest - R350 (the full foreign tax on interest qualifies as a tax credit for Jacob) Other (ix) Jacob incurred additional medical expenses of R30,000 in the year which were not refunded by the medical scheme. Required: (a) Explain when the security deposits would be gross income. (2 marks) (b) Calculate the normal tax liability of Jacob Skhosana for the 2016 year of assessment. Note: You should list all of the items referred to in the question, indicating by the use of zero (0) any amounts which are exempt or are not deductible for income tax purposes. (13 marks) (15 marks)4 (a) Custom Canoes (Pty) Lid (CCL) is a recognised small business corporation and a resident company. The company's sole shareholder and director is James Cool. CCL has a turnover of approximately R3,000,000 per annum. Due to the accelerated capital allowances, CCL currently has an assessed loss brought forward from the 2015 year of assessment of R400,000. James would like to take a year to travel and investigate the latest in canoe manufacturing technology. During this period, CCL will not trade. During his travels, apart from private expenditure, James expects to spend R60,000 on visits to manufacturing facilities and machine testing to see whether or not he should invest in new machines for the more efficient manufacturing of canoes by CCL. Required: (1) Advise James Cool whether or not Custom Canoes (Pty) Ltd's assessed loss may be carried forward despite the period in which the company will not trade. (2 marks) (ii) Advise James Cool whether or not on his return, the expenditure incurred during his travels to investigate new manufacturing technology may be claimed as a deduction. (2 marks) (b) James Cool is also considering starting a second venture with his cousin, John Paddle. The venture would trade as "Paddle Away'. The venture would specialise in the manufacture of custom oars for canoes, paddle boards, row boats, etc. James would personally contribute 60% of the initial capital to start the business and would also have a 60% share of the venture. Required: (1) Advise James Cool whether the registration of the new venture as (1) a company or (2) a partnership would have any impact on the classification of Custom Canoes (Pty) Ltd as a small business corporation. (3 marks) (ii) Assuming the qualifying turnover of Paddle Away would be less than R1 million, advise whether Paddle Away could register as a micro business or a small business corporation if it were (1) a company or (2) a partnership. (3 marks) (10 marks)3 Edu-on-the-Go (Pty) Ltd (Edu) is a value added tax (VAT) vendor company offering mobile tutors for students. Edu's services are chargeable to VAT and are not exempt educational services. The following details relate to Edu's transactions during its two-month VAT period, April to May 2016: (1) Tutoring services invoiced amounted to R40,000,000. (2) Purchased a replacement fleet of ten motor cars for R3,000,000. The ten vehicles replaced were sold back to the dealership at a price of R250,000. (3) Wages and salaries amounted to R2,700,000. (4) Paid R10,000 to a higher education institution (a not-for-profit organisation) for advertising space at an educational conference and donated a further R40,000 in cash as a sponsorship of the conference. (5) Paid invoices received in advance of the mid-year staff celebratory function of R100,000. This amount was all for advance payments to the caterers and entertainers. (6) Edu has been struggling to collect some of the outstanding tutoring fees and an amount of R140,000 was written off in the period. Bad debts are written off after 16 months and debts older than 270 days are considered doubtful. The current age analysis of debts to the end of May for the tutoring fees outstanding shows: 60 days R600,000 120 days R250,000 270 days R200,000 12 months R175,000 (7) Debts previously written off of R26,000 were recovered in the period. (8) Old stationery was donated to a charity. The market value of the stationery was R30,000 at the time of the donation. All the amounts in (1) to (5) above are stated exclusive of VAT, where applicable. Edu has in its possession all the necessary documentation. Required: (a) Advise Edu-on-the-Go (Pty) Ltd whether or not it is required to issue an invoice for the donation of the stationery (item (8)). (2 marks) (b) Calculate the net value added tax (VAT) payable by Edu-on-the-Go (Pty) Led in respect of the VAT period April to May 2016. Note: You should list all of the items referred to in the question and indicate by the use of a zero (0) any item which has no VAT effect. (8 marks) (10 marks)2 Rodney Rich is concerned about his wife and children's wellbeing should he die, as most of the assets of the family are in his name. In March 2016, Rodney transferred some of his wealth to his wife and children as follows: (1) The family home to his two children in equal shares. The home has a market value of R6 million and has a base cost of R4-5 million. (2) To his wife, furniture and personal belongings with a market value R1 million and a base cost of R900,000. Also, artwork from his art collection valued at R2-5 million and with a base cost of R1-2 million. (3) Cash of R500,000, to be split and R250,000 placed in each of his children's bank accounts. You may assume that any relevant donations tax has been determined and any relevant portion included in the base cost of the assets. Apart from the above, Rodney would like to sell the holiday home, which was purchased in June 2000 for R450,000 and is now worth R4,000,000. The holiday home was not valued at 1 October 2001. The sale will take place in June 2016 and the cash received will then be given to his wife. Required: (a) Calculate the taxable capital gain or assessed capital loss to be carried forward as a result of the above transactions. (9 marks) (b) State, with reasons, how Rodney could have avoided incurring any capital gains tax on the above transactions. (1 mark) (10 marks)Section B - ALL SIX questions are compulsory and MUST be attempted Please write your answers to all parts of these questions on the lined pages within the Candidate Answer Booklet. 1 Jane Thrifty is employed as a financial administrator with a large company which has branches all over South Africa. Jane is, at times, required to travel to a branch in her region to assist the branch with its administrative issues. In all cases, Jane drives to such branches using her own motor car. When away from the office for a night or two, Jane is provided with accommodation and a subsistence allowance by her employer. The original cost of Jane's car was R250,000 (including value added tax (VAT)) in June 2013 and the car was purchased with a maintenance plan for five years. The following information is relevant to the 2016 year of assessment: (1) Jane received a travel allowance of R6,000 per month from her employer. (2) Jane travelled 26,000 km for the year of which 8,000 km related to travel to branches in the region. This matches her logbook for the year of assessment. (3) Jane spent R27,000 on fuel for the year and a further R4,000 to replace the tyres on her car. (4) Jane made 12 trips during the year on which in each instance three nights were spent away from home. (5) In addition to the accommodation paid for by the company, Jane received a daily allowance of R400 per day for meals and incidentals. This allowance is not refunded if unspent. For most trips, the hosting branch offer Jane lunch and she generally eats a light dinner costing no more than R100. Breakfast is always included with the accommodation. Required: (a) Calculate the amount of the travel allowance which would be included for employees tax purposes on a monthly basis. (1 mark) (b) Calculate the amount of the subsistence allowance which would be included in Jane Thrifty's income for normal tax purposes for the 2016 year of assessment. (2 marks) (c) Calculate the maximum possible reduction to the travel allowance which Jane Thrifty can claim for normal tax purposes for the 2016 year of assessment. (7 marks) (10 marks)